In reference to the transactions from the aspect of industry split, other sectors (all manufacturing sectors excluding FMCG and FMCD) reported to be the largest driver for demand of warehouse. The sector accounted for 43% of the region’s warehousing leasing activities. 3
rd-Party-Logistics (3PL) players accounted for 27% of the transactions.
The surge in 3PL leasing activities in Bengaluru can largely be attributed to the enhanced need for extra storage/warehouse space by many occupiers during the first wave of COVID-19. The e-commerce sector commanded 22% of the share of transactions. The real pent-up demand by e-commerce is yet to translate into new warehousing spaces leased.
With respect to the transactions from the aspect of cluster split, the Attibele – Bommasandra cluster of warehouses accounted for 29% of the total transacted volume during FY2021. Warehouses in the Hoskote – Narsapura cluster in the east of the city accounts for 28% of the total transactions during the same period, and warehouses in the Nelamangala – Dabaspete cluster in the city’s north accounts for 15%. These two clusters have been gaining popularity amongst the 3PL and E-commerce sector.
The report also adds that the warehousing activity accounted for 75% of the transactions by volume, while industrial activity accounted for just 25% of the transactions during FY 2021. In the next 12-18 months, 3PL and e-commerce players will continue to dominate demand for new warehouse spaces.
Shantanu Mazumder Senior Director, Bengaluru, Knight Frank India
said, “A strong consumer base coupled with government measures in the form of GST had already facilitated a steady infusion of Grade A industrial and warehousing parks in the Bengaluru Metropolitan Region (BMR) in the past few years, facilitating occupiers to establish a footprint in its peripherals. In the past, developers have been successful in creating large institutional-grade warehousing facilities. The first wave of the pandemic helped establish many new online brands which required warehousing space, driving the demand for Grade A warehouses in the city. The second wave of the pandemic has further strengthened the need for Grade A warehouse in the city, fast-tracking the decision-making process. It is expected that the demand for Grade A warehouses will only increase or even outpace the supply.”
In the next 12-18 months, warehouse space demand will continue to be dominated by the 3PL, e-commerce and retail sectors. Land availability for new developments and investor participation will remain key for augmenting the existing supply of new industrial park ventures. The land rates and rents in the prominent clusters in Bengaluru are appended in the table below:
| City | FY2020 (mn sq ft) | FY2021 (mn sq ft) | FY2021 (mn sq ft) change YoY |
| NCR | 8.6 | 6.9 | -20% |
| Mumbai | 7.5 | 5.8 | -23% |
| Bengaluru | 4.3 | 4.3 | 0% |
| Chennai | 3.4 | 3.5 | 4% |
| Kolkata | 3.9 | 3.1 | -22% |
| Ahmedabad | 5.1 | 3 | -42% |
| Pune | 4.8 | 2.8 | -42% |
| Hyderabad | 3.4 | 2.4 | -30% |
| Total | 41.2 | 31.7 | -23% |
Source: Knight Frank Research
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